If you’re finding it difficult to keep up with your business’ energy bills, it’s important to get in touch with the energy supplier as soon as possible. Openly communicating the issue demonstrates your willingness to resolve the problem, and you’ll also be able to find out how they can help.
Your energy provider may be open to negotiating lower payments on a temporary basis to reduce the pressure on your business cash flow, or perhaps offering you extra time to repay arrears through a specific payment plan.
Energy companies can cut off your business if there’s no associated domestic supply, and they may take this action sooner rather than later if you don’t contact them. This would seriously jeopardise your ability to run the business effectively, and possibly bring trade to a standstill.
Here are a few ideas that could improve the situation:
Renegotiating debts and rearranging your business’ affairs can quickly reduce the pressure on cash flow. Possible routes include:
The business may be experiencing short-term financial difficulties - if so, you could be eligible to formally renegotiate unsecured debts within a Company Voluntary Arrangement. A licensed insolvency practitioner (IP) negotiates with your creditors for new repayment amounts that are more affordable for the company. Once in place, this arrangement enables your business to trade its way out of difficulty without the threat of winding up.
If your business is carrying other debts and is under threat of a winding-up petition, company administration may help it to recover its stability. There’s an eight-week moratorium to prevent any legal action being started by a creditor, and that ceases any existing actions against the company.
During this eight-week period, the administrator formulates a plan for the business – perhaps a business sale if the conditions are right, or if your business is viewed as viable for the future, the CVA option may be appropriate.
If your business is unable to pay its bills and cannot be rescued, the only remaining option is to enter voluntary liquidation. In doing so you may be eligible to claim director redundancy, which could pay for the process and/or provide you with some financial stability on a personal level.
Creditors’ Voluntary Liquidation (CVL) enables you to fulfil your legal obligations as a company director, and helps to minimise the chances of wrongful trading or misconduct allegations.
The significant increase in energy costs is having a widespread negative impact on businesses that are already struggling financially, so obtaining professional advice early on is vital.
UK Liquidators can support your business at this time, offering reliable unbiased advice on the best way forward. Please get in touch with our partner-led team to arrange a free, same-day consultation. We run a broad network of offices throughout the UK.
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If you are considering liquidation for your company, taking expert advice at an early stage is crucial. At UK Liquidators, our team of licensed insolvency practitioners are committed to providing limited company directors with the help and advice they need to make an informed decision.
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